Q4 2025 Home-Based Care M&A Report
- Emin Beganovic
- 43 minutes ago
- 5 min read
As 2025 came to a close, home-based care M&A volume rebounded from the relative lows of 2024, with a total of 105 transactions closed during the year, 21 more than the year prior. This brings the industry transaction volume closer to the levels seen in 2022 and 2023, which saw 110 and 111 deals, respectively.
Recapping the year, Cory Mertz, managing partner at Mertz Taggart, noted, “2025 has been a bounce-back year for deal volume. When the Fed made its first rate cut at the beginning of Q3 2024, we started to see an uptick in activity, which led to a strong first quarter to start the year. There were some new curveballs throughout 2025 with macroeconomic uncertainty, a new administration eager to shake things up, regulatory concerns regarding the CMS home health rule and increased scrutiny of hospice compliance, but M&A activity remained relatively strong as the Fed continued to cut rates and buyers saw an opportunity to deploy the dry powder they’ve been holding on to.”
The Federal Reserve cut rates three times in 2024 by 100 basis points (1%) and made an additional three cuts in 2025 by 75 basis points (0.75%). As interest rates come down, private equity firms and their portfolio companies, which make up the bulk of home-based care deal volume, have an easier time securing palatable financing for transactions.
Home-Based Care M&A
Q4 capped off the year with 26 completed transactions, matching the number of deals closed in Q2 of this year and exceeding Q4 2024 by eight. The quarter saw 14 sponsor-backed strategic deals, five private equity platform deals and one public company deal, among other transactions. Unlike the previous eight quarters, non-medical home care did not lead the pack in transactions closed but was instead dethroned by hospice, which saw a record 16 closed transactions, the highest number of deals seen in a single quarter since the COVID-fueled M&A frenzy in 2021.
While looking forward to 2026, Cory Mertz summarized his outlook by saying, “We expect to see activity continue to increase into the next year. Private equity funds have ample dry powder to invest, and there are many aging portfolio companies that we’ll likely see go to market in the coming months. There’s also a tendency for portfolio companies to close a few quick acquisitions to boost EBITDA right before kicking off a sale process, so we’re also expecting some additional add-on activity as some of these four, five and six-year-old serial acquirers look to exit soon.”
Home Health M&A
Home health M&A activity slowed with only three deals closed during the quarter, matching the number of transactions in Q4 of the year prior. All three transactions were add-ons by sponsor-backed portfolio companies.
VitalCaring Group, a portfolio company of The Vistria Group and Nautic Partners, acquired the home health operations and some of the hospice and palliative care operations of Traditions Health, a Franklin, Tennessee-based provider with patients in 18 states. The deal adds 35 home health, 37 hospice and three palliative care locations to the company’s operations in Oklahoma, Texas, Kansas and Missouri.
The fourth quarter also saw CMS release its much-anticipated finalized 2026 home health payment rule in November, which includes a 1.3% aggregate reduction from the prior year, estimated to be about $220 million in payments. Cory Mertz noted, “While the final rule still represents a cut from 2025’s rates, it’s much lower than the 6.4% originally proposed by CMS. We’re seeing some buyers who were previously hesitant to take a risk with all the uncertainty start to get more comfortable looking at home health assets again.”
Hospice M&A
Hospice M&A activity hit a record high, with 16 total transactions closed during the quarter, the highest seen since Q4 2021. These deals include 10 add-ons from sponsor-backed strategics, two closed private equity platforms and two acquisitions from strategics.
The two closed platforms were Legacy Hospice, a hospice provider with locations in Alabama, Arkansas, Mississippi, Missouri and Tennessee, which was acquired by Bain Capital Double Impact, and Agape Care Group, a hospice and palliative care provider for over 5,700 patients in 10 states, which was bought by Linden Capital Partners.
Among the add-on deals, the most notable was Traditions Health’s sale of its hospice and palliative care business to The Care Team, which acquired Traditions’ assets in Illinois, Indiana, Ohio and Virginia, LifeCare Home Health Family, which bought the Georgia operations, and Mission Healthcare, which acquired the assets in California and Oregon. LifeCare Home Health Family made another acquisition during the quarter when it purchased Infinity Hospice Care, a family-owned hospice provider serving Nevada and Arizona. And Uplift Hospice closed its third transaction of the year when it acquired Grace Hospice & Palliative Care and Grace Medical Group, a Tucson-based provider, increasing the company’s average daily census and density in Arizona.
Despite strong demand, hospice transactions still suffer from fears stemming from Medicare clawback risk, especially in enhanced oversight states. Ohio and Georgia recently joined California, Arizona, Nevada and Texas on the enhanced oversight state list, bringing the tally to six so far.
Mertz Taggart continues to recommend that providers considering a transaction in the next 24-to-36 months invest in a billing and compliance audit. Cory Mertz noted, “We strongly recommend that all hospice operators undergo a pre-market audit. It’s especially important to quantify clawback risk if you operate within any of those six enhanced oversight states.”
Home Care M&A
Non-medical home care, which typically contributes the largest share to overall home-based care M&A volume, saw another down quarter. At 11 transactions – including three platform deals, four sponsor-backed add-ons and one public company deal – Q4 represents the slowest quarter of the year, but is still in-line with the activity seen last year.
Among the transactions closed this quarter was Addus Homecare’s acquisition of Del Cielo Home Care Services, an Alice, Texas-based home care provider with 700 clients and annualized revenues of $12.5 million, for a purchase price of $7.4 million. Amivie, a portfolio company of Martis Capital, closed the acquisitions of Atrio Home Health, a Minnesota-based provider of in-home care services, and Rent a Daughter, a Beachwood, Ohio-based provider of senior care services.
The platform deals closed this quarter include JL Capital Group’s acquisition of Thema Home Care, a Downingtown, Pennsylvania-based provider of non-skilled home care, and NexPhase Capital’s acquisition of Always Best Care, a leading franchisor of in-home senior care services.
Although non-medical home care saw a relative low in M&A activity this quarter, Cory Mertz remains optimistic about its outlook, noting, “There are a number of highly acquisitive sponsor-backed portfolio companies in the space that are gearing up to exit in 2026, which means that they’ll be looking to scoop up a few more companies onto their platform to add additional cash flow before going to market. We’re also seeing elevated interest in private duty home care from strategic acquirers who are looking to diversify their payer mix.”
If you are interested, you can also download the .PDF version of the Q4 2025 Home-Based Care M&A Report via the following link:
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